Astro-century Education&TechnologyLtd's (SZSE:300654) Earnings May Just Be The Starting Point

Even though Astro-century Education&Technology Co.,Ltd's (SZSE:300654) recent earnings release was robust, the market didn't seem to notice. Investors are probably missing some underlying factors which are encouraging for the future of the company.

Check out our latest analysis for Astro-century Education&TechnologyLtd

The Impact Of Unusual Items On Profit

To properly understand Astro-century Education&TechnologyLtd's profit results, we need to consider the CN¥8.3m expense attributed to unusual items. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And, after all, that's exactly what the accounting terminology implies. If Astro-century Education&TechnologyLtd doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Astro-century Education&TechnologyLtd.

Our Take On Astro-century Education&TechnologyLtd's Profit Performance

Unusual items (expenses) detracted from Astro-century Education&TechnologyLtd's earnings over the last year, but we might see an improvement next year. Based on this observation, we consider it likely that Astro-century Education&TechnologyLtd's statutory profit actually understates its earnings potential! And the EPS is up 27% annually, over the last three years. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. If you'd like to know more about Astro-century Education&TechnologyLtd as a business, it's important to be aware of any risks it's facing. You'd be interested to know, that we found 1 warning sign for Astro-century Education&TechnologyLtd and you'll want to know about it.

Today we've zoomed in on a single data point to better understand the nature of Astro-century Education&TechnologyLtd's profit. But there are plenty of other ways to inform your opinion of a company. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.